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the odds of america falling off the fiscal cliff. in today's cover story, retailers turn the clock back on black friday - all the way to thursday. plus, damages continue to add up following superstorm sandy. what you can learn to protect yourself from future natural disasters. and, is apple's break-down causing some market jitters? first business starts now. you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's friday, november 9th. i'm angela miles. in today's first look: it's another downer for the
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stock market. the dow tumbled more than 100 points yesterday, falling to its lowest level since july, mostly due to uncertainty about the future of the u.s. and global economies. groupon shares fell 13% after the close on earnings news. revenues were up, but the coupon company had a net lost of nearly 3 million dollars. profits were up at disney thanks to espn and growth at theme parks. and priceline is set to buy online travel company kayak for $40 per share. how low will this market go? ben lichtenstein of joins us. good morning to you. happy friday. but is this a buying opportunity here? > > i don't think so. i think basically if you try and step up right now, you're kind of trying to play "catch the knife" if you will. there has been a lot of energy to the downside. it started wednesday. we saw a continuation of that yesterday. basically closed 'em out on the
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lows. everything across the board literally looks weak right now. the one thing that's been just kind of crazy and doesn't really fit in with all of this is that the dollar has been sideways, right around 81 even, and that the volatility index is still holding right around this 18, 19 level. everybody's talking about it. nobody knows why. but again, certainly worth taking note of. > > we will talk about that later in the show. gas is another situation. can you say that gas prices will remain low until the end of the year? > > it sure seems to be. again, we just saw that rejection off the crude $100 level. it seems like the national average in that mid-$3 range right now, certainly coming off from what was a scare. it was just a few months ago we were all concerned that we were going to see $4.50, $5 a gallon. but it seems to be, again, coming into the holiday session, this crude right now certainly has potential for some downside activity. if you saw it yesterday, it was trading below $85 a barrel at one point, but it's seen some wild rides in the last couple days. we saw that big day upside. it was up 4%. then again giving some back
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on wednesday, and then yesterday we saw a little bit of a bid coming back into that market. but for the most part, crude has been all over the place. but i think, i would expect, to see a $70 test before we see that $100 test again. > > ben lichtenstein of tradersaudio. thanks for being on the show today. > > my pleasure. thank you. walmart intends to open its stores for "black friday" shopping at 8pm thanksgiving night. in other words, "black thursday." in our cover story, is it an encroachment on family time or acknowledgment that not much happens after the pumpkin pie, so might as well shop? thanksgiving, america's quintessential family gathering, is being sliced away like a turkey by retailers. 4 a.m. friday door-busters have given way to midnight madness and 10 p.m. starts. this year, walmart and sears will open at 8 p.m. thanksgiving night, their earliest starts ever, while some families are still around the table. > > will you be here at 8pm? "no. maybe 10pm, yeah." "i think it's fine. it's family time. you could shop together."
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it's hard to tell what the majority of consumers think of thanksgiving wrapped up quicker than leftover condiments. "shame on you walmart. it's obnoxious." jim dion, a retail analyst, says black friday makes almost no sense. if you look at actual black friday margins, profitability, it's zero. they make no money on that day." walmart says it's starting at eight because "we got customer feedback that says 'i like to shop earlier so i can go to bed earlier.'" the varieties of bait - inexpensive specials. > > crock pots for $9.44, an ipad for $399 and you get a $75 gift card, any of that tempt you? "no. there's more to life than consumer items." if walmart offers crazy stupid specials, people will come buy it, but walmart will make no money and shoppers will be angry. so why? it's desperation
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and it's an act of stupidity." adding to the frenzy, an employee rights group called "our walmart" is threatening strikes on black friday at various walmart locations, alleging unfair labor practices. as democrats and republicans lock horns, americans are concerned about the chances the u.s. will actually go over that looming fiscal cliff. it's a 15% chance according to standard and poor's. the rating agency cites the deadlocked congress and the lack of a majority able to push through a plan as the biggest risk. if the country does take that economic plunge at the end of the year, it will trigger a series of tax increases and spending cuts. analysts say it could cause unemployment to surge to 9% plus a .5% drop in gdp. jp morgan is nearing a settlement with the sec over mortgage-backed securities. that's according to reports by the wall street journal. jp
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morgan and the sec are likely to reach a settlement soon that will end investigation into jp morgan's bear stearns unit. in the aftermath of the housing market collapse, wall street firms have been investigated for how mortgage loans were packaged and sold to investors. in 2010, goldman sachs paid a $550 million fine in a similar investigation. more trouble for greece. the country is on the verge of defaulting and eurozone leaders are reportedly delaying a decision on whether to give greece a bailout. protestors have been fighting the deep budget cuts greek leaders just approved this week. and now, reports say the eurozone leaders are said to be miles apart on another round of money greece needs by next week. one of the sticking points is how much debt relief greece should get and who will bear the loss from lower debt repayments.
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new estimates have been released regarding superstorm sandy's economic impact. "this storm will cost the coast around $50 billion in damages and economic loss. the state of new york, $33 billion in damage and economic loss." that was new york governor andrew cuomo. in related news, governor cuomo fired the state director of emergency management this week. cuomo says the director used a crew to remove a tree from his own home following the storm. meanwhile, the storm hurt revenues at united airlines. the airline said this week that revenue is down by $90 million. united was forced to cancel around 5300 flights. and, some automakers estimate 16,000 new vehicles were ruined by sandy. that number is likely to rise when gm and ford release estimates of losses. thanksgiving dinner will cost a bit more this year because of the rising cost of turkey. a 16-pound bird will set you back $22.23 - a per-pound increase of 4 cents since last year. the average thanksgiving dinner for ten is $49.48 according to the
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american farm bureau, which notes that price is less than a 1% increase. on the bright side, the prices of whipping cream, fresh cranberries and pumpkin pie mix have all fallen since last year. mcdonald's faced a mcdrop this week. mcdonald's saw same-store sales decline for the first time in nine years. sales in the u.s. and europe dropped 2.2%. lower demand and competition were to blame. other restaurants including wendy's and burger king have revamped menus in order to keep up with changing tastes. the revamp may have paid off at wendy's. the chain reported earnings this week, and while the company missed on expectations, in a positive sign, growth at newer restaurants is up. coffee bean prices continue to drop, but coffee chains are not likely to lower prices any time soon. coffee bean prices have fallen roughly 30% during the past year, to $1.71 per pound from $2.48. according to, prices on lattes and other drinks at starbucks and other chains remain the same. the coffee houses do have other overhead
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expenses. and analysts say starbucks is a power brand that is not likely to reduce prices unless customers slow their sip. hyundai and kia customers are suing the automakers for overstating the fuel efficiency of several models. the companies blame "procedural errors" at a shared south korea testing facility for the wrong gas mileage on cars. hyundai and kia plan to issue debit cards to 900,000 customers to reimburse them for additional fuel costs. but the class action lawsuit contends the compensation plan is "unnecessarily difficult." some gadget lovers are still critical of the price tag on apple's hot new "mini" ipad. the "mini" apple tablet sells for $329, which is more than competitor prices at $199. a cnn report guestimates the cost to make the ipad mini at $215. nbc news places the price at $198. amazon can now add wine to the long list of products it delivers. amazon revealed the service yesterday, which offers customers 1000 choices on wine from different u.s. wineries.
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winos can order up to 6 bottles to be delivered for a $10 delivery fee. the service is only available in 13 states, but amazon says that will change "soon." some restaurants are showing appreciation for our men and women in service with free food this veterans' day. krispy kreme, california pizza kitchen, and denny's are offering meals or food items. hooters will have free wings, and krispy kreme its famous donuts. applebees, chili's and olive garden are also providing free meals to any hero who stops by on monday. still to come, what was behind the market sell-off following president obama's election win? traders share their opinions later in traders unplugged. but first, in the wake of superstorm sandy, business owners are looking into disaster recovery options. learn
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how to protect yourself next, with bill moller.
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recently 2 east coast storms in 2 weeks. the weather can really wreak havoc, not just with lives of citizens, but also with the smooth operation of businesses. companies protect themselves, of course, with insurance, but more & more companies are
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implementing disaster recovery systems. let's talk with curtis peterson. he's vice president of operations for ringcentral, a cloud business phone system provider. and curtis, a business insures the hardware, but the point is they also need to back up the software, and that's what disaster recovery is all about. > > it sure is. and it's really backing up both. it's making sure that the hardware and is protected, and specifically the data on the systems is retained during any of these types of disasters that you mentioned. > > hurricane sandy took out a lot of businesses along the east coast and their systems. do you know what happened to maybe an actual business that did or maybe did not consider disaster recovery? > > yes. there are several businesses that did good planning for disaster recovery, had a lot of their applications, for example, in the cloud, where they were able to move out of their facilities or distribute their workforce into other areas with power and fuel and things like that that were a hindrance in the sandy aftermath. and they were able to continue at least successful
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operations to a degree, but certainly not complete loss of business as some others did who did not have those plans in place. > > i can understand large corporations doing this - it's an absolute essential thing. but what about small businesses? do they kind of see that as just an unnecessary expense, having a disaster relief system? > > they do. i meet with a lot of small businesses, and unfortunately, less than 25% of small businesses have any real dr plan, or disaster recovery plan, in place, one especially that's tested and true. and a small business has no margin for error here. they can actually lose profits on day one of a disaster or an inability to recover from a disaster. they are looking for solutions that allow them to keep their communications running, solutions that allow them continuous access to their data and data processing, and solutions that allow them to restart business operations as quickly as possible regardless of the event that happens, whether it is as bad as sandy or as inconvenient as a heavy
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snowstorm. > > curtis peterson, thank you so much. > > thank you. still ahead, now that the election is over, what that might mean for the stock market. traders tell us, right after this.
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the presidential election has traders all riled up this week. joining us for traders
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unplugged, pro traders alan knuckman and jared levy. good morning guys. round one: election reaction realities. did the market immediately sell off because president obama was re-elected? > > let me hear this one, alan. go ahead, tell us. > > absolutely, positively not. this was a sell-the-fact-type exit for a lot of people. it had always been priced in that obama was going to win. we're going to have a democratic senate, democratic president, and republican house. so nothing has changed. and guess what happened the last time nothing changed? the market was up over 100% over the last four years. > > here's what really happened. starting back in late of last year, you saw the chances for a republican candidate begin to rise, and it actually heated up here over the past couple- > > never got above 50% in the last year. > > hold on the sec, i'm going to talk. the s&p rallied about 215 points in that period of time. we lost about 3-4% over the past couple of days, and i think if you just look at it, if you just look at the futures
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reaction to what happened with obama's becoming president- > > we were up 1% on monday, we're down 2% the day after. that's not catastrophic. nothing has changed. > > round two: election winners. stocks, bonds, the vix or emergency bunkers? > > so on this one, right- and again, we just talked about obama winning and- > > how to make money, that's the question. > > how to make money. from here, buying the vix at these levels may be a play, but i think for the average person, what you need to do is look at some of the stocks that might benefit from obama's policies. obviously you're going to stay away from defense companies. you're probably going to stay away from maybe traditional oil, but maybe look to some of those alternative energy plays, and also obviously hospitals, may be a chance to- > > again, that's already been priced in. statistically speaking, romney has not been above 50% over the last year, so the market certainly was not... that possibility was so unlikely. if you look a hospital stocks, hospitals are going to benefit. they were up- a lot of them were up 10% the day after the election because they are going to benefit from more customers. isn't that what we want, more customers? > > more customers are good, and look at natural gas by the way. i think natural gas has got
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a place here over the next year no matter who would have gotten elected. > > once again oil companies win on that one. round third: gas gougers. gas was selling for $18 per gallon. it was spotted on craigslist in new york after superstorm sandy. are the gougers evil people or just capitalists? > > at one point, they're obviously doing what they need to do, they're providing a service where there are no services available. now, is it right? no. but this is why i actually back some of obama's policies, is where you need some regulation. this is why we have the markets we have right here. people come to one place and they exchange, and there are a set of rules and regulations. what do you think? > > the price shows ability to pay, and it's always a "larger fool" theory. is there a larger fool than you that's willing to pay more? that is the question. but the attorney general is getting involved, and i put this question here to embarrass you, and actually i'm not as embarrassed to know you as i thought i was going to be with your answer. > > ok, you both win on that one. now for the bonus round. i
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know it's been a tough week for traders. everybody's talking about this fiscal cliff. so name a famous cliff. either an actor ... > > clifford the big red dog. [ding[cheer > > nicely done. nicely done. good job guys. we'll see you soon. up next, why traders are watching apple for clues about what's next for the stock market.
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apple turned into a big heavyweight on the market yesterday. trader scott bauer of trading advantage joins us. good morning to you. it's been a sour apple lately in this market. > > yeah, that's a good way of putting it. people keep looking at some of the support areas that we've seen that apple just keeps blowing right through. first it was that $610 area, then $580, then $560, and now $520 is really the next one that people are going to be looking at. it's unbelievable. the stock is down over % now from where it was just a month-and-a- half ago or so, and that really
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is, like you said, weighing very heavily on the marketplace. > > and how well does that weigh on traders' minds when you see a stock like apple carrying so much weight? could this become a continual drag on the market? > > it has been certainly over the last week, week-and-a-half. now, if we see further drop from here, and if it breaks through $520 very precipitously, you're going to see the rest of the market come with it. if apple can hold now at $520, which is a real solid support area, the rest of the market will probably bounce back a little. but, the downside risk to the market, coming off of apple, is probably much greater than any sort of upside potential. > > what do you see on the volatility index? what is that telling you about the market? > > yesterday was a weird day, because with the market down all day, the vix was actually down most of the day and closed
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relatively unchanged, which is very confusing, because typically you see the inverse relationship: market down, vix up; market up, vix down. now, we have seen the vix rally over the last month or so, or the last two or three weeks, 5 to 10%. but, if you're only going by the vix right now, it is probably a matter that we are going to calm down going into the end of the year, even with the fiscal cliff hanging over us. > > good to have you on the show. happy friday scott. > > same to you angie. that's a wrap for this week. you won't want to miss our show next week. we will show you how some investors are making money on obamacare. we hope you will be back. from all of us at first business, thank you for watching and enjoy your weekend!
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ignacio. we're live in fremont where a man in critical condition after freeway crash, how the weather played a role. it's not just rain we have to worry about. part of the bay area may wake up with hail this morning. at this hour, dozens and dozens of people are standing in the rain. they have camped out overnight, we'll tell you what they're waiting for. complete bay area news coverage starts right now.
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this is ktvu channel 2 morning news. it is friday, you all made it. i'm brian flores. >> i'm pam cook. thank you for waking up with us this early hour. rain pretty much moved out or here for us. the skies were rumbling early this morning. we had showers and hail falling in some places. at this time it looks like it has shifted over the to the south bay as well as the east bay giving you a closer view of what's happening. at this time we have a few showers over the peninsula. off total east bay, off 580 a wet commute and san jose, highway 1, santa cruz, a little bit f of rain at this -- of rain at this hour. and a little bit cooler than 24 hours ago and what you c
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